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Report Examines California’s Pursuit of Sustainable Development with Affordable Housing

A report by the Terner Center at the University of California at Berkeley examined the affordable housing implications of California’s “Sustainable Communities and Climate Protection Act of 2008” (SB 375). The goal of SB 375 is to reduce greenhouse gas emissions while meeting the state’s housing needs. SB 375 attempts to achieve this goal by reducing car dependency and fostering transit-accessible development through strategic land use, transportation, and housing planning.

The report, California’s SB 375 and the Pursuit of Sustainable and Affordable Development, finds that incentives such as state-provided gap funding can prod jurisdictions to support development that meets environmental and affordable housing goals. The report also highlights the potential for Metropolitan Planning Organizations (MPOs) to link federal transportation funds to environmental and housing-related goals. These incentives, however, are not necessarily sufficient to overcome barriers such as development costs and neighborhood opposition in some jurisdictions.

SB 375 requires MPOs to develop a Sustainable Communities Strategy (SCS) in their federally-mandated Regional Transportation Plan. MPOs are regional transportation planning organizations responsible for transportation planning and federal transportation expenditures. Each SCS must outline a development strategy to reduce vehicle miles traveled, and thus, greenhouse gas emissions. SB 375 also requires MPOs to align their state-required Regional Housing Needs Allocations (RHNAs) with their SCS to facilitate housing development in transit-accessible locations. RHNAs are MPO estimates of the number of additional affordable housing units each jurisdiction needs to meet its projected growth. Finally, SB 375 allows an expedited state environmental review process for development projects that are consistent with the SCS.

The state established an incentive program in 2014, “Affordable Housing and Sustainable Communities (AHSC),” which offers grants and loans to development projects that further California’s climate change and affordable housing goals. The application process is extremely competitive due to insufficient funds. For the first three grant cycles since 2014, AHSC supported 6,000 affordable housing units, or 1% of the 540,000 affordable new units needed. This highlights the need for additional resources to provide incentives to produce more affordable housing.

MPOs can also provide incentives for jurisdictions to comply with SB 375 and RHNA affordable housing goals. The most innovative MPOs have linked transportation funding to housing, offering transportation funds for projects that are consistent with a SCS and a jurisdiction’s housing goals.

SB 375 did not include strong enforcement mechanisms, consequently jurisdictions unwilling to meet SB 375 planning requirements are largely unaffected. If a jurisdiction does not want new development, it faces few consequences for not complying. The report recommends strengthening enforcement of SB 375 and the RHNA housing goals. SB 35 passed in 2017, for example, opens the possibility for certain types of housing projects to be approved without review in jurisdictions that have not met their RHNA goals, but more needs to be done.

Finally, SB 375’s provisions that streamline and expedite the environmental review process for SCS-compliant projects have had minimal effect. Complicated requirements have discouraged many from utilizing the streamlining provisions.

The report, California’s SB 375 and the Pursuit of Sustainable and Affordable Development, is available at: